Calgary office market report

Notable gains for office market in Q1 2024

Positive absorption in Downtown and Beltline bolstered Calgary’s office market in the first quarter of the year. Meanwhile, a down quarter in suburban markets breaks a year long trend of positive absorption.

Strong absorption in downtown as energy sector moves announced

Vacancy in downtown Calgary dropped by 1.0% from the previous quarter. Contributing to this was a strong quarter of absorption, amounting to 494,659 square feet (sf), bolstered by activity announced by CNRL, AltaGas, and South Bow Corporation. CNRL’s move to the former Shell Centre will leave a shadow vacancy in the market that will be realized in a future quarter. Overall downtown annual absorption has remained positive for the past two years, a testament to both the return to office movement and Calgary’s economic resilience. While positive news for the city, challenges remain, including energy sector consolidation, staff reductions, and the weight of a large amount of class B office inventory.
 

Movement in the Beltline after stagnant year

The Beltline saw 131,166 sf of absorption and a 1.5% decrease in vacancy. Activity in the Beltline had stagnated through most of the past year. Buildings, such as the newly renovated 909/911 11th Avenue, contributed to positive leasing activity in Q1. Despite the positive results, vacancy remains elevated across all classes in the Beltline. 

Suburban streak broken

Overall absorption was negative in the suburbs at -115,733 sf. While Q1 results showed a decline, the suburban market had been on a positive absorption streak for the previous three quarters. Additionally, 10 out of the last 12 quarters have recorded positive absorption.

Overall market growth for three straight quarters

Calgary’s overall office market has seen positive absorption activity for three consecutive quarters. Overall vacancy has dropped 1.7% from this time last year. New office construction remains limited in volume scope and is only occurring in suburban submarkets. Major projects include UXBorough Medical Centre and Greenwich Village.